Why I’d start investing now in the stock markets

Manika Premsingh would start investing in stock markets now because the chances of coming out ahead faster are so much higher. 

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I began my stock market investing journey many years ago. But if I had to start, I think it would be a great time to start investing now. Contrarian as this sounds, I assure you it is not. Consider this. Some of the biggest FTSE 100 companies have been around for what seems like forever. They have survived a century that had two World Wars and a Great Depression. And these are among many other challenges faced in just the 20th century. Even as we are beginning the 21st century, there have been a few already. These companies are soldiering on after a huge blow from the financial crisis in the 2000s. And then they faced the near-shutdown of the global economy caused by the Covid-19 pandemic. 

The big challenges for now

That gives me a lot of confidence in the fact that they might just be very well placed for surviving the latest challenge to the global stock markets, triggered by Russia’s war on Ukraine, that is showing no signs of abating right now. There are many potentially challenging spillovers of this attack, of course. The most obvious one that we are already facing is the rise in oil and gas prices. Inflation was already running up even earlier, and with a rise in fuel prices it could well be on its way to spiralling out of control. And if we have a period of sustained high inflation, an economic slow down is not far behind. There is also the potential for social unrest, as Germany has pointed out. Russia is Europe’s biggest gas supplier and cutting off its supplies in response to the war could create a huge demand-supply mismatch. 

Why I’d start investing now

My point here is that considering the long-term history of FTSE 100 stocks, there is a strong probability that they can survive. And if I were to start buying stocks when they are dipping on account of broad market weakness, I could end up much farther ahead in a much shorter time than otherwise. That said, I would like to make my choices carefully. The last thing I want to do is to get into the stock markets now, get burned, and never pick up the confidence to get back into investing ever again. 

Best stocks to buy

I think some of my best bets right now could be global multinationals. Because they have interests in many parts of the world, and are not just Europe focused, they are less likely to feel the impact even if things get worse in Ukraine. Big oil companies like BP and Royal Dutch Shell are two such I like, though an economic slowdown could impact them down the line. Tobacco biggie Imperial Brands is another one which could also gain from being a defensive stock. 

Should you invest, the value of your investment may rise or fall and your capital is at risk. Before investing, your individual circumstances should be assessed. Consider taking independent financial advice.

Manika Premsingh owns BP, Royal Dutch Shell and Imperial Brands. The Motley Fool UK has recommended Imperial Brands. Views expressed on the companies mentioned in this article are those of the writer and therefore may differ from the official recommendations we make in our subscription services such as Share Advisor, Hidden Winners and Pro. Here at The Motley Fool we believe that considering a diverse range of insights makes us better investors.

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